Apple's Tablet Market Share Drops to 61.5% in Q3 2011 - IDC.

While Apple continues to lead the market of media tablets, its market share is declining, according to IDC. As the market of tablets grows extremely fast, more and more manufacturers start to offer competitive slates and leading manufacturer - Apple - starts to feel the pressure from them. Nonetheless, Apple still outsells its closest rival by nearly 11 to 1.

Worldwide media tablet shipments into sales channels rose by 23.9% on a sequential basis in the third calendar quarter of 2011 (Q3 2011) to 18.1 million units, according to IDC. That represents an increase of 264.5% from the same quarter last year, but 5.8% below the original forecast of 19.2 million units. Despite these slightly lower-than-expected shipments in Q3 2011, IDC sees strong demand in Q4 2011 and has increased its worldwide shipment forecast for 2011 to 63.3 million units, up from a previous projection of 62.5 million units.

Apple continued to drive worldwide media tablet shipments in Q3 2011. The company shipped 11.1 million units in Q3 2011, up from 9.3 million units in Q2 2011. That represents a 61.5% worldwide market share (down from 63.3% in Q 2011). HP entered and left the market in Q3 2011 with its TouchPad product. The company shipped 903,354 units to grab a 5% share of the worldwide market, number three behind Samsung's 5.6% market share. After IDC updated its taxonomy to move LCD-based devices such as Barnes & Noble's Nook Color into the media tablet category, Barnes & Noble shipped 805,458 units to achieve the number four spot with a 4.5% market share. Asustek Computer rounded out the top five with a 4% share.

"Amazon and Barnes & Noble are shaking up the media tablet market, and their success helps prove that there is an appetite for media tablets beyond Apple's iPad. That said, I fully expect Apple to have its best-ever quarter in Q4 2011, and in 2012 I think we'll see Apple's product begin to gain more traction outside of the consumer market, specifically with enterprise and education markets," said Tom Mainelli, research director of mobile connected devices at IDC.

After ceding share in Q3 2011 (down to 32.4% from 33.2% the previous quarter), IDC expects Android to make dramatic share gains in Q4 2011 growing to 40.3%. That increase is due mostly to the entrance of Amazon's Kindle Fire, and to a lesser extent the Barnes & Noble Nook tablet, into the market. The share increase comes at the expense of Blackberry (slipping from 1.1% to 0.7%), iOS (slipping from 61.5% to 59.0%), and webOS (slipping from 5% to 0%). Despite HP's announcement last week that it would contribute webOS to the open source community, IDC does not believe the operating system will reappear in the media tablet market in any meaningful way going forward.

"Apple's larger portfolio of tablet-specific apps, upcoming iPad versions, and growing physical store presence in key emerging markets like Asia/Pacific will help maintain its global leadership. However, an improving Android OS experience and lower competitor pricing in an environment with worldwide economic concerns should help Android to increase its market share," said Jennifer Song, research analyst at worldwide trackers at IDC.

Despite the loss of LCD-based products (relocated into the media tablet category), E-ink-based e-book readers continued to see strong shipment growth. In Q3 2011 the worldwide total improved to 6.5 million units, up from 5.1 million units in Q2 2011, representing quarter-over-quarter growth of 27% and year-over-year growth of 165.9%.

"Amazon's introduction of the $79 entry-level Kindle and $99 touch-based Kindle (both with ads) led to a round of price cuts from competitors. That drops these products well into the range of impulse and gift buys for many, and we expect a very strong Q4 2011 as a result," added Mr. Mainelli.

IDC expects growth to continue in the fourth quarter thanks to new products introductions and price cuts from the major vendors.

"From a worldwide perspective, e-book reader volumes in the U.S. are expected to remain a huge majority at 80% share. Europe, the second largest market, should rise to its highest volume levels in Q4 2011 due to holiday shopping, but is not growing at the expected rate due to lack of local language content and the uncertain euro zone climate," added Ms. Song.

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